The caricature of teenagers playing video games in basements is being redrawn as Roblox says its audience is aging out of one set of experiences and into others, promising a new level of monetization from older gamers with money to spend on layered avatar clothing and more.
Reporting second quarter earnings on Wednesday (Aug. 10), Roblox founder and CEO David Baszucki told analysts that the number of users over 13 years old rose 30% year over year — pointing to a potentially huge new market segment for the platform.
He said that in content, “We are approaching 50% of our top 1,000 experiences with more over 13 than under 13 players, with our developers producing experience that gained over a million hours per month is up 32% year on year.”
With Q2 revenue at $591.2 million, up 30% year over year, Average Bookings per DAU (ABPDAU) was $12.25 in the quarter, down 21% year over year and bringing monetization strategies into question as the platform weathers headwinds unique to gaming. Roblox stock fell more than 10% in after-hours trading as revenue growth slowed to 30% from 39% in Q1.
The aging out of Roblox teens into Roblox adults helps explain the performance of brand presence on the platform. Baszucki noted that Gucci Town received more than 30 million visits since March, while Tommy Play from Tommy Hilfiger saw over 7 million visits since June. Additionally, the platform saw successful releases of Wimbledon’s Wimble World and Spotify Island.
“We are getting to the point where our 17-through-24 cohort is going to pass our 9-through-12 cohort in size,” he said, adding that “the 17-to-24 cohort is larger, but once again, this is a great signal of the potential size of our market across all ages.”
As more brands move to the platform, Baszucki said that “many of the brands that are starting to show up on our platform are doing it unannounced, which means they’re doing it in a self-service way,” finding developers on their own or developing in-house capabilities.
“We think this highlights the future where our traditional developers have been 100% experienced developers for play or for social, but there’s an emerging class of developers who are brand support developers who will complement those traditional experience developers,” he continued.
Other initiatives like voice are gaining ground, with Baszucki saying, “We are rolling voice out. It is partially rolled out now with older players with validated IDs and we’re opening that aperture. We can measure increased engagement from the people using voice and so we’re very optimistic about what’s happening there.”
Along with greater voice applications and Roblox’s positioning itself as part social chat platform accordingly, he added, “We continue to work on innovative, immersive, native monetization systems, and we do expect to be rolling out a test of our immersive advertising system sometime later this year.”
Some of the major monetization approaches discussed during the Q2 call centered on hyper-realistic avatars, the sale of next-gen layered 3D clothing and users buying expressions and other capabilities to create responsive digital personas within the platform.
Chief Financial Officer Michael Guthrie said that “as of June 30, we had over 100 million users that had actually acquired a layered clothing item, and we’ve been doing tests to look at the economic output of those users and how they behave, and we’ve clearly seen it being accretive to bookings and Robux spent,” positioning it as a new revenue stream for Roblox and creators.
Asked about mainstreaming the metaverse via Roblox by creating or acquiring a development studio, Guthrie said, “Maybe we’ll address that on investor day. It wouldn’t surprise [me]. I know there have been inbound conversations with agencies.
“Whether that specifically is where we’ve gone, probably not, but why don’t we defer that for next month and we’ll dig into that?”